commerce essay

The Concept Of Total Quality Management Commerce Essay

Published: 23, March 2015

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The following article discusses the concept of total quality management as implemented in the organizations in the UAE. The UAE is developing at a rapid rate and therefore management of quality is an important principle. The article discusses the total quality management system taking into account the process of ADNOC which is an oil reserve company in the UAE (Abed, Hellyer, & Vine, 2006). The article discusses the understanding of quality for ADNOC and the further implementation of quality management in ADNOC. In different organization in the UAE the understanding of total quality management is different but the main goal of every organization in the UAE remains the same. The organizations work with the goal of creating high quality products (or services), which meets the basic needs of the customer and are ahead of the expectations of the customer. Due to various reasons the management of quality has become important for the companies in the UAE. However, a relationship needs to be determined concerning the feedback of customers for various products and services and the maintenance of quality in the organization. On a global level the organization in the UAE compete for increased revenues in the market. The companies in the UAE strive for providing products and services with the best possible quality. The reputation which has been developed by the organizations in the UAE is due to the high standards of quality which the organizations maintain. Due to the incorporation of the total quality management system in the organization the efficiency of the operations in the organization has increased.

Introduction

Among the various approaches of managing an organization Total quality management is an approach which is structured as well as comprehensive (Charantimath, 2003). It contributes in the management of the organization which aims to work for the product quality and improve it. The quality of the products or service which are offered by an organization are refined and improved with the help of total quality management as it involves continuous analysis and feedback and further work on it. As per the current scenario the organizations in the UAE are developing and adopting new strategies in order to gain competitive advantage in the international market. Among the various strategies which are adopted by the companies in the UAE total quality management is one of the key strategy in which the companies are working on the quality of the product or service which they are offering and therefore delivering a service or product which is competitively equal to other global organizations in the world. Quality is a primary need of the consumer in any type of product or service. Therefore, total quality management would contribute in customer satisfaction. The main aspect of TQM is that the product quality and the process involved in the quality of the product is the responsibility of each and every individual working in its manufacturing of the product or the service which is provided by the organization. Hence, the main role of TQM is capitalization on the involvement of different aspects such as management, supplier, the people who are involved in the development of the product, the customers. The main reason behind this is to considerably meet the needs which have been placed by the customer. In order to consider the concept of Total Quality Management in the work atmosphere in the UAE, ADNOC has been taken into consideration. ADNOC is Abu Dhabi National Oil Company which is owned by the state of the UAE. The organization has fourth position in the world which as access to the reserves of oil and gas in the country. The primary functioning of the company is in the UAE. However, the company also functions in international market as well.

Problem Statement

The problem on which the study is concentrated is to understand the relationship between the reduction in complaints of customer and total quality management in an organization in the UAE. The problem is specifically oriented concerning the organizations in the UAE. In case of ADNOC the customers are concerned with the oil and gas services which are provided by the company. In this particular scenario the customer expects that the product which is delivered to them is of high quality. Besides the quality of the product another concern of the customer is safety and security which is accompanied factors of quality. The problem of understanding the customer requirement and compliance with the requirement of customers in terms of quality is a critical problem as it would be defining the success of the failure of an organization. There is ambiguity in the organizations in understanding the reason which contributes to the complaints made by the customer and if the complaints could be resolved by the total quality management system. It can also be understood as that the organizations need to realize the importance of total quality management system concerning the customers and their feedback to the organization.

Importance of problem statement

Customers are important to every organization. The market share of an organization is decided by the response which the organization gets from the customers. The response from the customers would be good if the product or service which is being asked is in accordance with their basic needs, satisfied their expectations and is one step ahead of the requirements. In other words the product or service should be one step ahead of what is mentioned by the customers. This can be done only with the help of total quality management. In general an organization functions with the best possible quality. However, the complaints which are registered by the customer provide a future aspect of improvement in the product or service which is being offered by the organization. The complaints which are being registered by the customer need to be worked upon and later removed. The feedback which is provided by the customers contributes in the management of quality by the organization. However, if the analysis of the complaints and the rise or decline in the number of complaints is not understood in terms of quality management it would hamper the progress of the organization. This makes it important to study and understand the problem.

Brief History of the Company

ADNOC was founded in 1971 and has its headquarters in Abu Dhabi, UAE. The products which are provided by the organization are crude oil, fuels, lubricants (or oil products), natural gas (LNG and LPG) along with petrochemicals. The revenue which is earned by the organization (as per 2011) is US$75 billion. The UAE government is the owner of the company. The number of employees in the organization has been reported to be 23,000 (as per 2011). As per the oil reserves the company stands among the list of leading companies in the world. There are two oil refineries which are operated by the company. One of the oil reserves is Ruwais and the other is Umm Al Nar (ADNOC, 2009). The gas fields which are being developed by the company are both onshore and offshore. The export of natural gas is done by ADNOC in the form of liquefied natural gas. The exported LNG is also provided for the purpose of local utilities (such as electricity and water). United States is one of the major contractors with ADNOC contributing to majority of its earnings. In order to understand the criticality of total quality management system and its relationship with the customer complaints ADNOC would be the most suitable organization due to the large base of customers which the organization has and due to the large number of international operations which the organization has to handle. The domain of functioning of ADNOC is large and therefore the process used by the company for TQM would provide a proper insight.

Literature Review

With the development of organizations the customers experience lack in quality at one or other instance. The experience which the customer goes through may be from different organizations. The reason due to which the customer has to experience lack in quality is due to the lack in quality which the company offers. A customer when approaches an organization for a particular good or service expects that the organization would match up the expectations in terms of quality. An organization which has been termed successful has surely understood that the quality which is defined by the customers is an important aspect. In the UAE it has been noticed that due to the realization of importance of customer defined quality the organizations tend to increase the standards of quality in case of different products and services which they provide. The organizations in the UAE have moved one step ahead in terms of management of quality standards. The companies now intend to provide quality which meets the needs of the customers and is ahead one step. This means that the companies have adopted the concept of total quality management in order to function in accordance with the customers. The concept of total quality management has been considered to be an important factor in the improvement of quality in an organization at different levels. The important concern which comes in case of ADNOC is the definition of quality. Quality is a wide term and can be understood with different meanings. In the case of ADNOC quality has been primarily defined using the following four key aspects:

Product or service in accordance - This term takes into consideration the requirements and the needs of the customer and therefore makes sure that the product or service which is being manufactured is in accordance with the requirements which are defined by the customer. ADNOC is an oil company and therefore the requirements of the customers are concerned with the oil and the variety of oil which is provided to the customers for various intended purposes. In the technical terms this point can be understood as a product or service meeting the tolerance given by the customers and the targets which have been defined by the customer.

Appropriateness for use - Every product or service has certain defined intended use. The product which is being manufactured should be in accordance with the use which is defined by the customer. ADNOC manufactures keeping in mind that the need of the customer is fulfilled and the product is in proper use

Value for the money which is being paid - Price is an important consideration when it comes to purchasing of a certain product or service. The customer expects that when he or she pays price full returns for the price is given to him. This aspect of quality is considered often by the customers of the company

Services for support - the support services contribute to the judgement of the quality of the product. This important aspect explains that the quality is not limited to the delivery of product or service. Rather quality is also concerned with the process which is involved in the development of the product or service, environment of the organization and the people who are involved in the production of the product or service.

The term quality has been elaborated in terms of ADNOC as further the concept of total quality management is concerned with the adoption of these aspects Total quality management manages the aspects which have been discussed above keeping in mind the motives of the customer and further performs a feedback loop as a part of which the customer provides a feedback responding as per the deviation which has been noticed in the product or service which is provide to the customers. As a part of the study concerning total quality management it has been noticed that ADNOC concerns the following questions when formulating strategies for the total quality management. The company whenever proceeding with creating balance in quality and cost ponders over the following points:

Identification of the target market

Identification of the needs of the customers

Evaluation of the product and service ( including the assessment of its use)

Understanding of the expectations of the customers (An important point which has been considered by ADNOC is that there stands a difference between need and expectation of customers. This difference has helped ADNOC in the adoption of Total quality management as the company would primarily focus on the needs of the customer and then it would further function as per the expectations of the customer. The final output which would be provided by the company would be ahead of the expectations of the customer.

Understanding of the process which the company adopts in order to meet the needs of the customers

Establishment of quality and time of cycle for the development of product or service.

As the above points suggests the points which have been taken into consideration by ADNOC are directly related with the satisfaction of the customers. The adoption of the above points has helped the company in reducing the number of complaints which were received by the company in the initial years of its functioning. Besides another important aspect is that ADNOC has been successful with the formulation and implementation of strategies concerning total quality management.

Results

In order to implement Total quality management ADNOC follows the TQM wheel. There are different approaches to total quality management such as "guru" approach and "quality award" approach, ala carte approach which allows choosing certain elements form a pool of different elements related to total quality management.

The TQM wheel can be explained as follows:

img_tqmwheel-mini (1).gif

The TQM wheel is divided into three segments which are: vertical alignment, unit optimization, horizontal integration. The vertical alignment is concerned with Hoshin Planning which is a part of the total quality management system and is incorporated in order to enable thinking in a strategic manner and the to improve the plan for implementation which has been designed in order to achieve a goal in the organization. The hoshin planning is concerned with three main aspects which are who, what and how. The hoshin planning helps organization to formulate a process which would help in the execution of breakthrough every year (TQM Wheel). The leadership of the organization is also provided a defined mechanism due to the hoshin planning which later contributes to the increased efficiency of the organization. The horizontal integration component of the TQM wheel is also concerned with the same three questions and is implemented between the teams or the departments in an organization. This component is responsible for the unification of the activities concerning Total quality management in the company. In the organization there are a number of problems which are not in the scope of a single unit of the company and at the same time there are problems which are related to only one unit in the company. In any of the case it is important that a team is present which would represent the perception of every individual and help in solving the problem. Cross functional management is more of a behavioural characteristic than an implemented strategy. The aspect of total quality management in which an organization takes into consideration the feedback of the customers is better known as the quality function deployment. The process of quality function deployment helps the organization to work in a structured manner and would provide the means which would help in the identification of customer complaints and later help in their resolution. Quality function deployment is the most important part of the total quality management. The third unit of the TQM wheel is unit optimization which is concerned with daily management. Daily management enables every individual in the organization in understanding his or her responsibility in the organization and his or her job role which is to be performed for the purpose of running the organization smoothly. The activities related to daily management can be started by a team or an individual. During the implementation of the daily management activity there are certain points which are to be taken into consideration so that efficiency of the organization increases:

The vision and mission of the organization should be known.

The customers of the organization should be known

The needs and expectations of the customers should be known

The suppliers of the organization should be known

The communication should be done in a proper manner to the suppliers.

The product or service which is to be delivered should be known thoroughly.

The job role should be known to the team or the individual in a proper manner.

The strengths and weaknesses of the team should also be known.

The above points are concerned with the implementation of the daily management system so that the efficiency of the organization is increased.

The discussion which has been done clearly explains the TQM wheel. ADNOC implements the TQM wheel as per the points which have been mentioned above. The implementation of the TQM wheel has given advantage to the organization. The specific problem which we are concerned about in the article is related to the relationship between the number of customer complaints and its dependency on Total Quality Management. ADNOC with the implementation of the TQM wheel as its strategy for Total Quality Management has reduced the number of customer complaints to a great extent. The company has now more focussed functioning towards its vision and mission and therefore it clearly explains that the implementation of total quality management in any of its available form would contribute in the reduction in the number of complaints in an organization.

Recommendations

The recommendations concerning the implementation of total quality management system primarily focus on the execution of process of total quality management. The main aim when implementing total quality management is to provide the customers with a product or service which is ahead than the needs and requirements which have been cited by the customers.

Making use of other methods - As discussed in the results section there exists other methods which help in the implementation of total quality in an organization. Another model of total quality management known as the ten element model can also be implemented in coordination with the TQM wheel. The implementation of another model or process in coordination with the existing model would provide a wide scope for functioning and making the best use of total quality management. The results which would be obtained by total quality management would be of high degree of efficiency and would thus contribute in the development of the organization. The implementation of the idea may be complex in the starting but once a hybrid model has been prepared it would be highly beneficial for the organization.

Focussing on eight key elements - In respect to the total quality management there are eight key elements (ethics, integrity, trust, training, teamwork, leadership, recognition and communication) (Padhi, 2010). It is recommended that ADNOC primarily focus on these elements of total quality management system. If the focus is made on these elements it would help ADNOC in performing the operations in an accurate manner in the first time it is done. The defect and the waste which are related to the operations of the company would be eradicated from the different operations if the elements are worked upon.

Customer feedback on the total quality management system- The customers provide feedback concerning the product or service as a part of the total quality management system. However, it is recommended that the organization takes the feedback from the customers on the implementation of the total quality management done by ADNOC. The customers need to be questioned if the quality standards which are provided by the company using the particular method of implementation are as per their expectations or there needs to be certain change in the system. This would help in the evaluation of the system and improvement if needed.

Conclusion

The article has discussed the basics of total quality management. The problem of understanding the relationship between the customer complaints and total quality management system has understood explaining the lack of understanding in the organizations concerning the importance of total quality management system and its impact on the feedback on the customers. The various aspects of total quality management system have been discussed as it has been presented in different literatures. ADNOC which is state owned oil reserves organization has been taken into consideration and the process of total quality management system adopted by the company has been discussed. The process has three main components which ensure the proper working of the organization as per the vision and mission of the company. However, it has been recommended that ADNOC adopts another model along with the existing model in order to improve its functionality further and gain competitive advantage in the market share. The recommendations are which have been made are concerned with the total quality management system process in ADNOC. In the oil market the company holds a strong position. However, as per the changing market scenario it is suggested that the company adopts a wider implementation of the total quality management system as it would improve efficiency, effectiveness and customer satisfaction.

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